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CONTINENTAL TERMINALS, INC. v. WATERFRONT COMMN. O

February 21, 1980

CONTINENTAL TERMINALS, INC., Plaintiff, Counterclaim-Defendant,
v.
THE WATERFRONT COMMISSION OF NEW YORK HARBOR, Defendant, Counterclaim-Plaintiff.



The opinion of the court was delivered by: SWEET

Continental filed this action on March 21, 1979, seeking a declaration that it is not required to be licensed as a stevedore and that its employees are not required to be registered under the Waterfront Commission Act (the "Act"), N.Y.Unconsol.Laws, §§ 9801 et seq.; N.J.Stat.Ann. §§ 32:23-1 et seq.; Pub.L. No. 252, Ch. 407, 67 Stat. 541 (1953). Continental also seeks permanently to enjoin the Commission from requiring such registration and licensure. The Commission has filed a counterclaim for a declaration that Continental is performing services which require it to be licensed as a stevedore under the Act and that its employees must be registered or licensed in accordance with the Act. The Commission also seeks injunctive relief, money damages, and assessments to support costs of administration which it claims Continental owes.

Continental and the Commission have now cross-moved for summary judgment pursuant to Rule 56, Fed.R.Civ.P. The pertinent facts are undisputed. The principal issue in the action is whether Continental's warehousing operations take place on a pier as that term is defined in the Act. The court has discovered that what appears to be a pier in concept becomes less apparent when reduced to prose. However difficult the task has been, the court is convinced that Continental's warehousing operations do take place "on a pier" and that Continental is a stevedore under the Act. Continental's motion is denied and the Commission's motion is granted.

 At a hearing on the motion in this case, the court raised the issue of subject matter jurisdiction. Both parties contend that the interpretation of the Act presents a question of federal statutory interpretation, and that jurisdiction is conferred under 28 U.S.C. § 1337.

 The Commission is a bi-state agency formed pursuant to a compact between New York and New Jersey in 1953, authorized by Congress in accordance with its power under Article I, Section 10, Clause 3 of the United States Constitution. The jurisdictional issue, one which has never been decided by the Second Circuit, is whether a case involving construction of a bi-state compact is a case "arising under any Act of Congress regulating commerce." 28 U.S.C. § 1337.

 In Petty v. Tennessee-Missouri Bridge Commission, 359 U.S. 275, 79 S. Ct. 785, 3 L. Ed. 2d 804 (1959), an employee of a congressionally-approved bi-state commission was killed while working on a ferryboat on the Mississippi River. His widow filed an action against the Commission under the Jones Act, 46 U.S.C. § 688. Although jurisdiction existed under that Act, the Supreme Court stated in dictum:

 
The construction of a compact sanctioned by Congress under Art. I, § 10, cl. 3, of the Constitution presents a federal question. . . . Moreover, the meaning of a compact is a question on which this Court has final say. . . . (W)here the waiver is, as here, claimed to arise from a compact between several States, the Court is called on to interpret not unilateral state action but the terms of a consensual agreement, the meaning of which, because made by different States acting under the Constitution and with congressional approval, is a question of federal law. . . . In making that interpretation we must treat the compact as a living interstate agreement which performs high functions in our federalism, including the operation of vast interstate enterprises.

 Id. at 278-79, 79 S. Ct. at 788 (citations and footnotes omitted).

 Although subsequent cases have cast some doubt on the sweeping language of the Court in Petty, *fn1" the courts have generally held that interpretation of state statutes implementing a compact presents a federal question. Trotman v. Palisades Interstate Park Commission, 557 F.2d 35 (2d Cir. 1977); League to Save Lake Tahoe v. Tahoe Regional Planning Agency, 507 F.2d 517 (9th Cir. 1974), cert. denied, 420 U.S. 974, 95 S. Ct. 1398, 43 L. Ed. 2d 654 (1975); Walker v. King, 448 F. Supp. 580 (S.D.N.Y.1978). In Lake Tahoe the court held that the federal courts had subject matter jurisdiction over a suit alleging that defendant, an agency established pursuant to a bi-state compact, had failed to comply with the legal requirements of the compact. In examining whether federal jurisdiction existed, the court took into account the degree to which Congress had scrutinized the need for the particular agency and the importance of uniformity of interpretation of the compact. See also Trotman v. Palisades Interstate Park Commission, supra; Walker v. King, supra; New York Shipping Assoc., Inc. v. Waterfront Commission of New York Harbor, No. 78-995 (D.N.J. June 1, 1978); Federal Question Jurisdiction to Interpret Interstate Compacts, 65 Geo.L.J. 87 (1975).

 In this case, the consent of Congress to the Act was not perfunctory. Congress independently investigated the evils that necessitated a bi-state agency. DeVeau v. Braisted, 363 U.S. 144, 149, 80 S. Ct. 1146, 1149, 4 L. Ed. 2d 1109 (1960). Moreover, uniform construction of the Act is essential to prevent inconsistent enforcement of its requirements in New York and New Jersey. For example it would be inequitable to impose on a New York warehouseman the economic burdens associated with being a "stevedore," and not impose those burdens on a New Jersey warehouseman doing substantially the same business.

 For the reasons stated, this court has subject matter jurisdiction to decide the merits of this case and provide appropriate relief.

 The principal issue in this case is whether warehousing activities carried on by Continental bring it within the definition of "stevedore" in the Act. Stevedores are defined in the Act as:

 
contractors (not including employees) engaged for compensation pursuant to a contract or arrangement with any person to perform labor or services incidental to the movement of waterborne freight on vessels berthed at piers, on piers or at other waterfront terminals, including, but not limited to, cargo storage, cargo repairing, coopering, general maintenance, mechanical or miscellaneous work . . .

 N.Y.Unconsol.Laws § 9905(1)(b); N.J.Stat.Ann. § 32:23-85(1)(b). Waterborne freight is defined in the Act as:

 
freight which has been, or will be, carried by or consigned for carriage by a ...

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